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 April 1, 1996

On Industry: Key employment sectors drive Laramie’s economy

State and local government employs 38 percent of workers, pays 55 percent of employee income and creates 33 percent of value added in Albany County.

That sector can be divided into education and noneducation functions. The University of Wyoming and the public school system account for 5 percent of all employment and 9 percent of income.

Students at the University of Wyoming and government employees support the second-largest sector, personal services (excluding finance, insurance and real estate), with 23 percent of employment, 15 percent of income and 17 percent of value added.

The same consumers also support the third-largest sector in the county, wholesale and retail trade, with 20 percent of employment, 11 percent of income and 12 percent of value added.

Thus, the service, trade and government sectors comprise 81 percent of employment. Any significant cutback in the number of students attending the University of Wyoming, aid to education, or reduction in the size of state and local government will have serious consequences on the economy of Albany County and Laramie.

Some industries are larger than necessary to support local needs — i.e., they export goods or services and provide valuable cash flow into the county.

Examples include eating and drinking, railroad-related services, cement, engineering services, sawmills, educational services, state government services, range-fed cattle, management and consulting services, and automotive dealers. Travelers along Interstate 80 buy some of these services.

How important is manufacturing? In Albany County it accounts for only 5 percent of jobs and wages, but the sector is growing in importance. Two manufacturing industries, cement and wood products, export more than $30 million of products each year. Range-fed cattle create about $12 million of exports annually.

On the other hand, what does Albany County import? What is demanded locally but not supplied by local producers? Recent data indicates that as much as $25 million of hospital services are imported annually to Albany County. Other large importers are real estate services, petroleum products, electric services, wholesale trade and insurance services.

How interrelated are the industries in Albany County? One measure of interrelatedness is the size of employment multipliers. The more interrelated, the higher the multiplier. Industries with high employment multipliers include insurance services (3.2), radio and TV broadcasting (2.3), and sawmills (2.0). A multiplier of 3.2, for example, generates 2.2 jobs locally for each primary job in the industry.

Large personal-income multipliers represent industries that cause significant increases in personal income for each dollar paid as wages and salaries in the primary industry. Greenhouses and nurseries and real estate have large personal-income multipliers, in the 2.5 to 4.0 range.

Government and retail trade sectors do not have large multipliers for at least two reasons. First, they are both at the end of the consumption chain, close to the households that consume their output and, thus, have fewer intermediate production impacts.

Second, with government, we expect the sector to benefit the taxpayer directly in the form of transfer payments and services and not be involved in production and processing of resources. Thus, government-sector multipliers are usually very close to 1.0, and retail-trade multipliers are usually well under 2.0.

To better understand which sectors have been growing in Albany County, we examined County Business Patterns data from 1988 to 1993. During this period, Albany County experienced a 17 percent growth in employment and a 28 percent increase in total wage payments. These numbers exclude government sectors and the University.

Several sectors seem to have become more competitive, with a greater number of establishments but fewer employees. These include gas stations, doctors’ offices, child day-care facilities and engineering services.

Other sectors had higher employment levels with the same number of establishments, indicating sectors that are growing. These include grocery stores, restaurants and legal services.

Finally, some industries expanded both the number of establishments and the number of employees. These include wholesale trade, drinking places, beauty shops and religious organizations.

In summary, the economy of Albany County is dominated by state and local government, personal services and retail trade. However, manufacturing and service sectors are growing in importance.

John Green is a consultant and professor of economics at the University of Northern Colorado in Greeley. He can be reached at (970) 484-6463. Eric Siverts is president of Siverts and Associates in Fort Collins. He can be reached at (970) 493-2485.

State and local government employs 38 percent of workers, pays 55 percent of employee income and creates 33 percent of value added in Albany County.

That sector can be divided into education and noneducation functions. The University of Wyoming and the public school system account for 5 percent of all employment and 9 percent of income.

Students at the University of Wyoming and government employees support the second-largest sector, personal services (excluding finance, insurance and real estate), with 23 percent of employment, 15 percent of income and 17 percent of value added.

The same consumers also support the third-largest sector in the…

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